Member Sign In

You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate but affiliated companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.

If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.

Paramount Inks Deal with Warner Bros

You have chosen to follow this author. You will receive an email notification when this author publishes a new article. Click submit to continue.

You are alredy following the Author

The Author could not be added at this time, please try again later. If problem persists, please contact Zacks Customer support.

Please Login

Paramount Home Media Distribution, a unit of Viacom Inc. (VIAB - Analyst Report), has entered into an agreement with Warner Bros. Home Entertainment Group, a unit of Time Warner Inc. (TWX - Analyst Report), to distribute the physical discs of 600 movies from Paramount’s stable. The deal is expected to enrich the long-term value of Paramount’s older movie titles.

According to the terms of the deal, Time Warner will get the exclusive right to distribute the Blu-ray and DVDs of the selected 600 movies in the U.S. and Canada including the films like Terms of Endearment, Ferris Bueller’s Day Off, Airplane, and others. Flixster – the Warner Bros. movie streaming and discovery services will get the non exclusive right to sell the movies in Ultra Violet electronic sell through (EST), Ultra Violet Disc-to-Digital and Video On Demand (VOD) format.

Additionally, Flixster will also act as a dedicated locker access service provider for all paramount ultraviolet movies. The three-year deal is expected to commence from the beginning of 2013.

On the flip side, Paramount will retain all digital rights for these titles including the EST, VOD and subscription video-on-demand format and doesn’t provide the rights to distribute blockbuster Paramount films like Transformers, Star Trek and Indiana Jones. As part of the deal, Viacom will receive licensing fees and will receive various long-term strategic co-operations from Flixster.

In the modern era of digitalization more and more subscribers now prefer to view movies online through their smartphones and tablets. We believe it’s a strategic move by Viacom to expand its digital presence through Flixter, which develops movie discovery applications for several social networking sites.

The agreement, if becomes successful, will promote its digital content ownership in addition to expanding its already impressive Ultra Violet library that necessarily allows streaming and downloading of content on multiple devices.

We are maintaining our long-term Neutral recommendation on Viacom Inc. However, currently, the company retains a Zacks #3 Rank, implying a short-term Hold rating.

Top Zacks Features

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

Zacks Research is Reported On:

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1986 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1986-2011 and were examined and attested by Baker Tilly, an independent accounting firm.

Visit performance for information about the performance numbers displayed above.